All Eyes On The September Jobs Report

All Eyes On The September Jobs Report

Today’s Big Picture

US market futures point to a modestly lower open Friday morning. After the disappointing manufacturing and services data this week, all eyes will be on today’s Nonfarm Payrolls report, which is expected to see 145,000 jobs added in September, up from 130,000 in August with the unemployment rate holding at 3.7% and wages gaining +0.2%. Keep in mind that the General Motors (GM) strike will add some confusion to the data as striking workers aren’t counted in payrolls.

We’ll also be looking for any updates on the previous downward revisions to payrolls. In August the BLS cut job gain estimates for 2018 and early 2019 by about 500,000, the largest such downward revision in the past decade. Overall we’ve seen downward revisions for around 17 months – a sure sign that labor market dynamics ...

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Tematica Investing: Thematic Tailwinds for 2019 and Scaling into AXON

Tematica Investing: Thematic Tailwinds for 2019 and Scaling into AXON

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Tematica Options+: A Thematic Look at 2019 and a New Option Trade

Tematica Options+: A Thematic Look at 2019 and a New Option Trade

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Sony reminds that content remains king

Sony reminds that content remains king

Even though we’ve consolidated our investing themes a few months back, which meant folding Content is King, Connected Society, and Cashless Consumption to form Digital Lifestyle, companies like Sony continue to ride those underlying tailwinds. While most recall Sony the company that pioneered the personal electronics industry, it has quietly remade itself into one that is benefitting from the consumer’s desire for content.

The thing is, most other companies ranging from Netflix and Amazon to Facebook, Google and before too long Apple are focused on streaming video content. Sony, on the other hand, has successfully tapped into the tailwind of consumer demand for gaming. That not only makes for a different business model than in the past at Sony, but it is also one that is driving growth.

For those on the fence with this, Nintendo also delivered a robust quarter and guided its outlook higher as we head into the holiday shopping season also due to gaming.

 

Japan’s Sony Corp boosted its annual profit outlook by 30 percent to a record level after a strong second-quarter, propelled by popular game titles like “Marvel’s Spider-Man” as well as growing demand for its online gaming services.

The results are a vindication of a strategic shift by the entertainment and electronics firm to build up more content-oriented businesses like gaming, which generate recurring revenue and are less susceptible to the earnings ups and downs seen in consumer electronics.

“Sony has become, more than most people realize, a company that generates profit through content. Until just a few years ago, the worry was always that it was going to revise down on hardware woes but now it has transformed to generate stable earnings,” said Hideki Yasuda, an analyst at Ace Securities.

… domestic gaming peer Nintendo Co Ltd said sales of Switch consoles and games pushed operating profit up 30 percent in the July-September period to reach the firm’s highest quarterly result in eight years.

Source: Sony forecasts big jump to record annual profit on winning gaming strategy | Reuters

WEEKLY ISSUE: Confirming Data Points for Apple and Universal Display

WEEKLY ISSUE: Confirming Data Points for Apple and Universal Display

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Facebook’s Watch get the international treatment and amps the content arms race

Facebook’s Watch get the international treatment and amps the content arms race

Over the last few quarters, we’ve seen a growing number of streaming content services come to market to challenge the success had by Netflix and to a lesser extent Amazon’s Prime Video. And the new entrants are from over given the pending launch of Disney’s Disney Play, AT&T/Time Warner’s DC Universe, Walmart’s Vudu and of course the highly anticipated one from Apple. Core essentials include a wide array of original programming and a global reach, which is a twin focus at Netflix and increasingly Amazon.

It comes as little surprise then that Facebook is now expanding the reach of its Watch streaming video service to “everywhere” offering a global reach to its content partners and of course it advertising ones as well. The question is given the growing privacy concerns, will Watch help Facebook reinvigorate its stickiness in the US and other markets but drive average revenue per user outside of the US as well?

As we get the answer to that question, we continue to see a global content arms race that runs the risk of diluting the content offering as the streaming video service markets become increasingly crowded. If we’re right, it could be a repeat of cable TV channels, just not on your TV.

Facebook has announced the international rollout of Facebook Watch, its video destination for episodic content, which first launched in the U.S. a year ago this month. The social media giant said Wednesday that the VOD service would be “available everywhere” from Thursday, giving publishers and content creators a worldwide market for their videos.

“With the global launch of Watch, we are supporting publishers and creators globally in two critical areas: helping them to make money from their videos on Facebook and better understand how their content is performing,” the company said in a statement.

Watch launched in the U.S. in August 2017 with the goal of offering users a place on Facebook to discover shows and video creators and to start conversations with friends, other fans and even the creators themselves. The company said that, since the launch, it had made the experience more social, including making it easier to see which videos friends have liked or shared, and creating shows with audience participation at their core. In June, Facebook said it would  launch a slate of new shows boasting interactive features such as polls and quizzes to fulfill the platform’s goal of fostering a sense of community between creators and users.

Taking Watch global would also create new opportunities for content creators as the service expanded its video Ad Breaks program to enable more partners to monetize their videos, the company said. The Ad Breaks service officially launches Thursday in the U.K., Ireland, Australia and New Zealand, in addition to the U.S. It will launch in another 21 countries in September, including France, Germany, Spain, Argentina, Colombia, El Salvador, Guatemala, and Thailand. Facebook said the service would support both English-language content and content in various local languages. Further countries and language will be added in the coming months.

The company said it had lowered the threshold for publishers and creators to be eligible to make money from their videos. Those creating three-minute videos that have 10,000 followers, generate more than 30,000 one-minute views within a two-month period, or meet Facebook’s monetization eligibility standards would qualify.

Source: Facebook Watch Rolls Out Internationally – Variety

WEEKLY ISSUE: Scaling deeper into Dycom shares

WEEKLY ISSUE: Scaling deeper into Dycom shares

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AT&T and Time Warner launch WatchTV, with new unlimited data plans

AT&T and Time Warner launch WatchTV, with new unlimited data plans

The dust has barely settled on the legal ruling that is paving the way for AT&T (T) to combine with Time Warner (TWX), and we are alread hearing of new products and services to stem from this combination. No surprise as we are seeing a blurring between mobile networks and devices, social media and content companies as Apple (AAPL), Facebook (FB), Google (GOOGL) and now AT&T join the hunt for original content alongside Netflix (NFLX), Amazon (AMZN), and Hulu, which soon may be controlled by Disney if it successfully fends of Comcast to win 21st Century Fox.

While we as consumers have become used to having the content I want, when I want it with Tivo and then the content I want, when I want it on the device I want it on with streaming services, it looks now like it will be “the content I want, when I want it, on the device I want on the platform I choose.” All part of the overlapping to be had with our Connected Society and Content is King investing themes that we are reformulating into Digital Lifestyle – more on that soon.

In short, a content arms race is in the offing, and it will likely ripple through broadcast TV as well as advertising. Think of it as a sequel to what we saw with newspaper, magazine and book publishing as new business models for streaming content come to market… the looming question in my mind is how much will today’s consumer have to spend on all of these offerings before it becomes too pricey?

And what about Sprint (S) and T-Mobile USA (TMUS)…

 

Taking advantage of the recent approval of its merger with Time Warner, AT&T on Thursday announced WatchTV, a new live TV service premiering next week — and initially tied to two new unlimited wireless data plans.

WatchTV incorporates over 30 channels, among them several under the wing of Time Warner such as CNN, Cartoon Network, TBS, and Turner Classic Movies. Sometime after launch AT&T will grow the lineup to include Comedy Central, Nicktoons, and several other channels.

People will be able to watch on “virtually every current smartphone, tablet, or Web browser,” as well as “certain streaming devices.” The company didn’t immediately specify compatible Apple platforms, but these will presumably include at least the iPhone and iPad, given their popularity and AT&T’s long-standing relationship with Apple.

The first data plan is “AT&T Unlimited &More”, which will also include $15 in monthly credit towards DirecTV Now. People who pay extra for “&More Premium” will get higher-quality video, 15 gigabytes of tethered data, and the option to add one of several “premium” services at no charge — initial examples include TV channels like HBO or Showtime, and music platforms like Pandora Premium or Amazon Music Unlimited.

&More Premium customers can also choose to apply their $15 credit towards DirecTV or U-verse TV, instead of just DirecTV Now.

WatchTV will at some point be available as a $15-per-month standalone service, but no timeline is available.

Source: AT&T uses Time Warner merger to launch WatchTV, paired with new unlimited data plans